Chapter 5 Study Sheet for Exam 2
A binding minimum wage...
Alters both the quantity demanded and quantity supplied of labor.
Which of the following is NOT a rationing mechanism used by landlords in cities with rent control. A. Bribes B. Price C. Race D. Waiting lists
B. Price
Suppose that in a particular market, the supply curve is highly elastic and the demand curve is highly inelastic. If a tax is imposed in this market, then the..
Buyers will bear a greater burden of the tax than the sellers.
A $5 tax levied on the buyers of pants will cause the...
Demand curve for pants to shift down by $5.
If the government removes a binding price ceiling from a market, then the price received by the sellers will..
Increase, and the quantity sold in the market will increase.
The long run effects of rent controls are a good illustration of the principal that..
People respond to incentives.
A tax imposed on the sellers of a good will raise the...
Price paid by buyers and lower the equilibrium quantity.
A tax imposed on the sellers of a good will...
Raise the price buyers pay and lower the effective price sellers receive.
The tax imposed on the buyers of a good will
Raise the price buyers pay and lower the effective price sellers receive.
The federal government uses the revenue from the FICA (Federal Insurance Contribution Act) tax to pay for...
Social Security and Medicare
If the minimum wage exceeds the equilibrium wage, then
The quantity supplied of labor will exceed the quantity demanded.
Suppose the government has imposed a price floor on cellular phones. Which of the following events could transform the floor price from one that is binding to one that is not binding?
Traditional land lines pones become more expensive.
A tax Burden....
falls more heavily on the side of the market that is less elastic.
Minimum-wage laws dictate the
lowest price employers may pay for labor.
One disadvantage of government subsides over price controls is that subsidies...
make higher taxes necessary.
The minimum wage, if it is binding, raises the incomes of..
only those workers whose jobs would pay less than the minimum wage if it didn't exist.
Rent control policies tend to cause....
relatively smaller shortages in the short run than in the long run because supply and demand tends to be more inelastic in the short run than in the long run.
If a tax is levied on the sellers of a product, then there will be a(n)
upward shift of the supply curve.
